Defendant billed for new wheelchairs, instead spruced up soiled, decrepit, used chairs

SEATTLE — Attorney General Bob Ferguson today announced the owner of a wheelchair company has been ordered to pay $2.7 million dollars for fraudulently billing the Medicaid program for 119 new wheelchairs, but instead delivering used wheelchairs to the poor and disabled across the state.

Last Friday, a federal bankruptcy judge in the Western District of Washington (Seattle division) ordered Michael Mann, owner of Seattle-based Wheelchairs Plus, Inc., to pay for violating the state’s Medicaid Fraud False Claims Act and Medicaid Provider Fraudulent Practices law. This civil case was initially filed in Thurston County Superior Court, but after Mann filed bankruptcy in May 2015, the state moved the case to bankruptcy court.

U.S. Bankruptcy Judge Timothy Dore also ruled that Friday’s judgment cannot be discharged in the proceedings, meaning Mann cannot avoid paying the judgment due to bankruptcy.

“It is deplorable when fraudsters take advantage of a vulnerable population for financial gain,” said Ferguson. “My office will hold healthcare providers accountable when they fail to provide adequate care and submit false bills.”

The AGO alleged that from 2009 to 2012, Mann purchased used wheelchair parts from websites such as Craigslist or from nursing home “bone yards.” Mann then cobbled together mismatched parts, including soiled pads and cushions. After reassembling chairs, he would slap on a new coat of paint and add a false serial number that identified the chair as new.

After Mann delivered the used wheelchair to a Medicaid client, he submitted a false claim to the state Medicaid program — which does not cover used wheelchairs — seeking several thousand dollars in reimbursement for a “new” chair. Mann paid approximately $600 to rebuild each chair.

Collectively, Mann unlawfully received over $550,000 in Medicaid payments he was not entitled to.

The AGO alleges Mann violated state law by: (1) Misrepresenting that the wheelchairs were new, when in fact they were used; and (2) filing a false Medicaid statement.

The $2.7 million judgment represents civil penalties, damages and prejudgment interest. Medicaid is jointly funded by the state and federal government. Washington’s Medicaid program will receive approximately half of the judgment collected from Mann. The rest is returned to the federal government.

One of the state’ s most effective tools to combat Medicaid fraud is the Medicaid Fraud False Claims Act, which authorizes the Attorney General to bring civil cases against fraudulent providers to recover Medicaid funds.

Since the act’s passage in 2012, civil fraud recoveries have increased 28 percent, and the state has recovered $3 for every $1 invested in enforcement under the act.

The AGO has recovered $6.3 million that it otherwise would not have been able to without its authority under the FCA.

If the FCA is not renewed, Washington could lose significant federal dollars. The federal government provides a $3-to-$1 match for all state moneys provided to the AGO to enforce the False Claims Act.

Report Medicaid fraud in Washington

The Attorney General's Medicaid Fraud Control Unit is responsible for the investigation and prosecution of healthcare provider fraud committed against the state’s Medicaid program. The unit also coordinates with local law enforcement authorities to investigate and prosecute abuse and neglect in cases involving vulnerable adults residing in Medicaid-funded residential facilities.

The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.